Oil and Gold steady but risks to outlook remain

Oil stable for now but downside pressure remains

Oil prices have stabilized in recent days, with WTI hovering around the $40 mark after coming under heavy pressure earlier this week.

Prices remain vulnerable despite the fact that they have settled as the week has progressed. The risks to the outlook remain to the downside due to the rising Covid numbers across Europe which could necessitate further action from OPEC+ before the end of the year.

It could be this that has prevented oil prices falling further this week, after Saudi Energy Minister Abdulaziz bin Salman last week warned against shorting oil.

Gold hits two month low

Gold hit a two month low today and remains under pressure as support for the dollar continues to grow.

The yellow metal clearly has not lost its correlation with risk, with the dollar continuing to be the preferred save haven during times of turbulence. If the next month is going to be a challenge for risk markets, the dollar could have more downside to come yet.

The next barrier to the downside is $1,800, which could provide some support in the near-term.

 

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.